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Why Bundesbank retirement plan is "stupid"

Wednesday, August 17, 2016 - 01:26

German Vice-Chancellor Sigmar Gabriel has dismissed a proposal by the Bundesbank to increase the retirement age to 69. As Sonia Legg reports, he called the plan ''stupid'' and defended Germany's job market./

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He seemed to enjoy his official visit to a former mine in Essen. But Germany's 56-year-old Vice Chancellor didn't like the idea of anyone working until they're 69. And he said the government wouldn't be acting on the Bundesbank's recommendation to raise the retirement age. (SOUNDBITE) (German) GERMAN VICE-CHANCELLOR, SIGMAR GABRIEL, SAYING: "If I was a banker at the Bundesbank then I would also come up with these ideas. They have high incomes, little physical stress and a long life expectancy with large pensions. Craftsmen, saleswomen and nurses think it's a stupid idea and so do I." The retirement age for Germans is scheduled to rise gradually to 67 by 2030. But the Bundesbank reckons the increase won't be enough to keep state pensions at their current levels - 43 per cent of the average income. It warns when baby-boomers retire there'll be fewer younger workers to replace them. Some say there's also a risk new immigrants will push up unemployment - Gabriel rejects that. (SOUNDBITE) (German) GERMAN VICE-CHANCELLOR, SIGMAR GABRIEL, SAYING: "We have more than 34 million employed people in Germany, we've never had that many, and thankfully good jobs with fair salaries are increasing." The Bundesbank's calculations are based on a lower-than-expected return on the money invested in the pension system. Another dig perhaps at the ECB's ultra-low interest rates.

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Why Bundesbank retirement plan is "stupid"

Wednesday, August 17, 2016 - 01:26